Democrats Approve Budget, Tax Increase for School Infrastructure, Rec Center in Watauga

Published Tuesday, June 6, 2017 at 12:07 pm

Prior to the vote, the Watauga County Board of Commissioners discuss the 2017-18 budget at Tuesday morning’s meeting. Photo by Jesse Wood

By Jesse Wood

In a 3-2 vote on Tuesday morning, the Watauga County Board of Commissioners approved the fiscal-year 2017-18 budget that includes a 4-cent tax increase on property owners to fund Watauga County Schools infrastructure and a community rec center.

Democrats on the commission – John Welch, Billy Kennedy and Larry Turnbow – voted in favor of the budget, while Republicans Jimmy Hodges and Perry Yates voted against the budget, specifically citing the property tax increase.

The 4-cent tax increase would generate $3.52 million in annual revenue until the next property revaluation in 2022 and the commissioners earmarked $1.5 million of that to go toward the long-term Capital Improvement Plan for Watauga County Schools and $2.02 million for a community rec center.

A 4-cent property tax increase represents an extra $40 per year that property owners would pay per $100,000 valuation. So residents with a $200,000 property would pay an extra $80 per year and so on. This will move Watauga County from having the second-lowest property tax in the state to the fourth-lowest property tax in the state at $0.353.

In 2018, Watauga County voters will also vote to levy an extra 1/4-cent on the sales tax. If the voters approve of this sales tax increase, then the commissioners said they would drop the 4-cent increase to a 2-cent increase.

The commissioners held a public hearing in May, when the majority of folks voiced their support for the property tax increase to fund the rec center and necessary capital improvements for Watauga County Schools. See extensive coverage of the public hearing here.

This Tuesday morning, the commissioners shared opinions on the tax increases for about an hour. As Commissioner Billy Kennedy noted last year, the county hasn’t raised taxes in 12 years.

“Of course, no one likes to pay taxes. This comes to about a 1 percent tax increase over the last 12 years. That’s below inflation, so we are falling behind,” Kennedy said. “These are hard choices, and we’ve thought them through … We just need to catch up a little bit for what we haven’t done to take care of our facilities over these years.”

Two of the schools – Blowing Rock and Bethel – were built in the ‘30s and four others – Valle Crucis (‘40), Green Valley and Parkway School (‘52) and Hardin Park (’72) – are aging as well. It’s estimated to cost well over $100 million to fund the replacement of all six of these schools in the future, according to 2015 Watauga County Schools Capital Improvement Plan.

The commissioners have also set a goal to limit the cost of any community rec center to under $30 million.

Commissioner Jimmy Hodges said that it seems as if the other commissioners are “shooting in the dark” with respect to raising taxes without knowing exactly what the rec center and school infrastructure is going to cost.

“I don’t agree with a 4-cent sales tax. We need to do some long-range planning … I would rather wait until next budget time and make a decision on raising property taxes when we have all of our numbers in order and know exactly what we are going to be spending. To me we are kind of shooting in the dark at this time,” Hodges said.

Hodges and Commissioner Perry Yates favored a sales tax increase up to 1/2-cent rather than a property tax increase because they said it would take the entire tax burden increase off of local property owners and put some of it on the tourists and college students. This sales tax increase would also align with the consumption tax increases that the Republicans in the N.C. General Assembly have been moving towards the last few years.

The 1/2-cent sales tax increase would generate about the same amount of revenue that a 4-cent property tax increase would generate. The state would have to approve this ½-cent measure.

“By keeping our property taxes low, we can increase are chances of recruiting businesses and creating new jobs for our citizens and in turn generate more sales tax,” Yates said.

Yates agreed, though, that the county hasn’t done well in planning for future school infrastructure needs: “I feel we should be planning for a new K-8 school every 10 years and for the last 30 to 40 years, we have failed to do that.”

During the meeting, it was brought up that the N.C. General Assembly is considering a $1.9 billion bond referendum for North Carolinians to vote on in 2018 that would help fund school construction.

But as Commissioner John Welch pointed out, Watauga County would see a far-lower share of these funds than surrounding counties because it is considered a “rich county” along the economic spectrum.  

“This is a budget that will begin building a foundation for what this county needs … We can keep kicking the can down the road – most of our cans have been kicked so far there is no can left,” Welch said. “I want to see a balanced approach to this. I am totally fine in putting the sales tax referendum on the primary and ratcheting back whatever is passed. It’s definitely a long-term budget.”

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